How the Government Shutdown Could Hurt Small Business

The fact that national parks are closed during the federal government shutdown might inconvenience some travelers, but it doesn’t threaten their livelihoods. But what if your small business relies on tourism near a park?

Several small businesses near Yosemite National Park fear they may have to shut down, NBC Bay Area says. Wildfires, and now the shutdown, have cut deeply into the number of available customers. Dori Jones, owner of a cafe, told the station she lost 75 percent of her business in peak tourism months because of the Rim Fire, and now she has to deal with the shutdown’s impact.

“During the 1995 government shutdown when there was an 80 percent drop in lodging in and around Yosemite, the park lost roughly $300,000 a day, while surrounding communities lost hundreds of thousands more,” the website says.

Even in areas without rampant wildfires, the shutdown could have dire consequences. Bicycle shop owner Fred Pagles, in Springdale, Utah, near Zion National Park, told NBC News his store could last only about a month if the shutdown continues, and he expects to lose several thousand dollars in the process. Another business owner in the area said he expects to lay off several employees in order to survive that long.

It’s not just businesses dependent on national park tourism, either. Some companies that were in the process of seeking government loans are in trouble, The Wall Street Journal says. Even when the government starts back up, there will be a backlog of applications to process — and desperate businesses may have to turn to higher-interest loans in the meantime. Meanwhile, companies that contracted to provide services to the federal government are left with workers sitting on their hands.

A survey of 100 small-business owners shows nearly half of them have already been hurt by the shutdown because of cancellations or reduced business, CNNMoney says. “And if the shutdown drags on, they said it could hurt 20 percent of their business.”

The time for a small business to seek financing is not when they need it and are most desperate, but when their financials are looking the best and they appear not to need funding.